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| The Tax Publishers2020 TaxPub(DT) 5420 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where assessee had furnished all relevant facts within his knowledge and offered a credible explanation, then the onus reverted to the revenue to prove that these facts were not correct. Thus, addition made by AO on account of unsecured loan of Rs. 50 lacs was directed to be deleted as AO failed to bring anything tangible on record to prove both or either of the allegations.
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Income from undisclosed sources - Addition under section 68 - Receipts from unsecured loan -
During the year, assessee had received unsecured loan from a company. AO alleged that as per the information received from the Investigation Wing that this company had been floated by the entry operators and was a dummy company involved in providing accommodation entry in the garb of ostensible business transactions though in fact not conducting any business operations and as such the amounts received from M/s. R were to be treated as bogus and taxable under section 68.AO also alleged that the lender company was the dummy company, the loan received was bogus, the Inspector Report proved non-existence of the company at the given address and the notice under section 133(6) had not been complied with properly. Held: In the instant case, AO held that assessee-company was neither having any stock nor fixed assets and suspected that the company to be of a non-viable entity. Similarly, AO had also suspected the lender company also as a dummy company but without bringing anything tangible on record to prove both or either of the allegations. Where assessee had furnished all relevant facts within his knowledge and offered a credible explanation, then the onus reverted to the revenue to prove that these facts were not correct. In such a case, the revenue could not draw the inference based upon suspicion or doubt or perception of culpability or on the quantum of the amount involved particularly when the question was one of taxation under the deeming provision. Thus, addition made by AO on account of unsecured loan of Rs. 50 lacs was directed to be deleted.
REFERRED : Pr. CIT-4 v. M/s. Himachal Fibres Ltd. (2018) 98 taxmann.com 172 (Del) : 2018 TaxPub(DT) 1390 (Del-HC); Pr. CIT-6 v. M/s. N.C. Cables Ltd. (2017) 391 ITR 11 (Del) : 2017 TaxPub(DT) 0264 (Del-HC); Pr. CIT-8 v. Softline Creations (P) Ltd. (2016) 387 ITR 636 (Del) : 2016 TaxPub(DT) 4531 (Del-HC) and Pr. CIT v. M/s. Himachal Fibers Ltd. (2018) 98 taxmann.com 173 (SC) : 2018 TaxPub(DT) 5572 (SC).
FAVOUR : In assessee's favour
A.Y. :
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